RECOVERING FRAUDULENTLY OBTAINED ASSISTANCE

ISSUE DATE: 08/2016

The county agency must pursue recovery from clients who obtain assistance fraudulently.

Reconstruct each budget month and corresponding payment month. Use the policies and procedures that were in effect for the payment month. The overpayment or underpayment is the difference between the benefit amount the client actually received before recoupment and the benefit amount the client should have received before recoupment. For more information, see 0022 (Budgeting and Benefit Determination).

If any part of a county-calculated fraud overpayment is reduced, either as part of a stipulated plea agreement, in a pre-trial diversion order, or in a conviction order, reduce the fraud claim to reflect that reduction in the claim. When you reduce a fraud claim pursuant to these actions, you may establish a household error for the over-issued period or program you removed from the fraud claim(s). Any resulting household error claim is subject to standards and procedures for administrative or civil recovery, depending on how that claim is established.

If a court finds a person not guilty of welfare fraud, you may also establish or maintain a household error claim based on the same action. A court may determine that welfare fraud has not been established or criminal intent does not exist, not whether or not an overpayment occurred.

A court has broad discretion to set restitution for any person convicted of welfare fraud. This is done through sentencing after a person is found guilty of welfare fraud. The amount of restitution may not be the same as the overpayment you determined. Restitution is often tied to what a court determines a person is capable of paying during the probation period.

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Any restitution ordered in addition to the county-determined fraud overpayment does NOT increase or otherwise affect that claim. This can include fines, penalties, accrued interest when the amount owed is converted and docketed as a civil judgment, and the value of community service. The value of any restitution added to the fraud claim is collected and retained entirely by the court or county agency that preferred the fraud charge.

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If a court orders monetary restitution for an amount less than the county-determined fraud overpayment for which the person was charged and convicted, the fraud claim is ordinarily not reduced. The lower restitution is simply the amount that the court requires repaid as satisfaction of the terms of probation. If a court orders a methodology or formula for computing the fraud claim, reduce the fraud claim accordingly. In this event, the remainder of the overpayment may still be established and recovered as a household error claim by administrative or civil process.

The client's total overpayment may be different from the court order. For example, if the client had a previous overpayment for a different time period, add the previous overpayment and the current overpayment to get the client's total overpayment.